Rarely does a development proposal in fractious San Francisco receive broad support.

But as the owner of a 40-story Market Street tower studies turning the top half into housing, everyone from the Chamber of Commerce to a supervisor who made his political name fighting gentrification appears to be open to the idea.

And even though San Francisco has few examples of high-rise living in its traditional downtown, real estate observers say the demand exists -- even in a bland modern tower built as a corporate headquarters.

"There is no downside. You're talking a wonderful location where all your homes would have views," said Alan Mark, president of Mark Co., which specializes in central city condominium sales. "Right now there's a huge void in housing supply for people who want to live downtown."

That's also the view of Tishman Speyer Properties, the New York developer that purchased the buildings at 555 and 575 Market Street from the ChevronTexaco oil firm for $189 million in 1999. Tishman executives are poised to file the paperwork so the city can begin an environmental review of the still-tentative project.

The complex, built by Chevron as its headquarters and finished in 1975, sits within the district of San Francisco SupervisorChris Daly, a member of the steering committee of the San Francisco Tenant Union and a frequent critic of development. Yesterday, though, Daly said there could be advantages in converting tower space to apartments or condominiums.

"Generally, I'm supportive of this concept," said Daly, who stressed that affordable housing must be part of the mix, as required by city policy. "I want to see the environmental impact first, but if we can get housing downtown while keeping offices from spilling into neighborhoods, I'd be behind it."

Carol Piasente of the San Francisco Chamber of Commerce, which is sponsoring a conference today on the need to create more housing for workers, was unabashedly enthusiastic.

"It's the kind of project that really fits with the proposals we're making, " said Piasente, a chamber vice president. "Obviously, the city needs commercial space, but we also need to increase housing, and the Chevron tower is perfectly placed for that."

At this point, according to managing director Ezra Mersey, Tishman hasn't decided on the exact approach to converting the top 20 floors of 575 Market to housing -- except that on average, the 12,000-square-foot floors would be divided into no more than six or seven units each.

"We need to understand what the demand is," Mersey said. "The mix of units? We don't know yet. But we're confident the demand exists."

The confidence includes some wishful thinking. Though San Francisco's downtown is vibrant, housing until recently has stayed on the fringes. The first two residential towers opened last year: the Four Seasons, where prices for the 142 condos start at $1 million, and the Paramont, where rents for one- bedroom apartments in the 486-unit tower start at $1,955.

During the past year, average rates for both rentals and condos in nearby neighborhoods have slumped by roughly 20 percent. But in the long run, analysts say, the market is strong.

"Your market is soft now, but it should come back with a vengeance," said Ron Johnsey of Axiometrics, a Dallas real estate research firm. "By the time the building is ready, the market should be red hot."

As for the novelty of converting a prim corporate tower -- as opposed to an older building with architectural flair -- one national observer brushed aside the lack of sex appeal.

"Remember the three rules of real estate -- one isn't 'charm.' It's all location," said John McIlwaine, a senior fellow at the Urban Land Institute in Washington, D.C. "If you're building nice apartments inside, people don't care what the outside looks like."